"The
software application, known as the Labor Force Schedule
Optimizer System received initial funding last year, when the
Governors approved $13.4 million for development and deployment.
Today, the board approved additional funding of $1.2 million to
expand the program to a total of 90 facilities nationwide. Paul
Vogel, Vice President, Network Operations Management. Vogel said the
application considers each plant's operating plan, network
responsibilities, mail processing equipment and specific mail flows.
It incorporates all scheduling requirements of postal employee labor
agreements."

Labor Force Schedule Optimizer System (SOS)is a powerful
management support tool for service delivery organizations.
It provides significant cost-saving options through optimized labor
scheduling. It applies special value to 24/7 operations with
potential of flexibility in shifts, days off, break periods, etc. It
can minimize one of many elements such as cost and idle time. SOS
encapsulates advanced mathematical optimization technology in an
easy to use software package. It has been applied successfully
at eight large (in excess of 50,000 square meters) mail sorting
centers. SOS develops a flexible and cost optimal labor schedule to
satisfy the demand for labor created by the operating plan of
equipment or other work-defined requirements. SOS is web-enabled,
so management can access and use it from anywhere in the world.

SOS can be used to generate cost optimal scenarios, and examine
tradeoffs among different scenarios that are acceptable to the work
force and management. With SOS, organizations can be fully prepared
to negotiate fairly with labor unions - whether to establish new
timing for schedules or to propose substituting labor types. SOS
provides a fact-based approach to redefining labor-management
agreements.

How does SOS work? SOS works in five
simple steps!The user selects the data from
an historical week to run the model. An external algorithm optimizes
this selection. Relevant data is then inputted. This can include an
increased number of shift start-times that management allows,
equipment/operating schedules and wage rates.

The user then defines the parameters related to labor agreements,
i.e. full or part-time headcount ratios; which shifts must be given
days off consecutively; how much variation in starting times to
require from one day of the week to the next, and in what windows to
allow placement of the lunch period.

The optimization technology then processes the input data and
parameters and generates schedules that achieve minimum cost. The
user then varies any of the parameters to examine the cost impact of
these variations and the practicality of the resulting schedules

With
most postal and courier services entering a new era of consolidation
and increased global competition, the industry finds itself dealing
with a labor force configuration that does not match current and
evolving requirements for long term success. The labor force size,
skill mix, and the inflexibility of fixed schedule shifts result in
costs and inefficiencies no longer accepted by the marketplace. The
challenge of scheduling a 24-hour, multi-shift operation to match
varying workload demands over a day, a week, or for months, is
nearly impossible to meet without a powerful decision support
system.

SOS successThe United States Postal Service (USPS) has conducted feasibility
tests of SOS at a large and a medium-sized mail-sorting center.
Subsequently, the USPS signed a license agreement to conduct further
pilot testing of SOS at additional sorting centers. This advanced
pilot is underway at some of the largest USPS sorting centers. This
phase of testing means additional refinements will be made and
cost-capture procedures firmly established.Optimizing the decision makingPostal and courier service executives have had limited access to the
mathematical optimization technology that can substantially improve
planning and decision making. The reasons are twofold.

Professionally designed schedule optimizers have not yet been built
for the postal industry. Schedulers developed internally by postal
employees have not benefited from precision solutions generated
through the expert use of mixed integer linear optimization. In
general, internally developed systems have not gained wide
acceptance because of deficiencies in capability, usability, or
both. Internally developed schedule optimizers have lacked the
budgets needed to develop and deploy this sophisticated technology.

Another reason is that attempts to use modified personnel optimizers
from other industries have not succeeded. This approach has not
provided the flexibility and versatility needed to address the
complex work, management and union cultures of the postal industry.

Cutting costsFull-time, permanent postal employees have enjoyed long-term jobs
with set benefit packages and steady work hours. The extent to which
temporary and part-time workers are used is limited by labor
agreements. Temporary and part-time workers may have lower benefit
ratios, offer more flexible work schedules, or both.

Without a comprehensive decision support tool, management tends to
significantly overstaff in order to guarantee service resulting in
lost opportunities to minimize costs. Organizations are also unable
to fully use the available labor force flexibility effectively
without a decision tool. The results are excessive expenditures and
frequent idle times for employees. There are no tools that exactly
match staffing decisions with the demands placed by the equipment or
facility operating plans. In the current competitive environment,
service levels are of paramount importance – so the natural tendency
in the absence of a proper planning tool has been to have high
availability of excess labor – just in case the schedules developed
by less sophisticated methods were inaccurate.

SOS allows postal organizations to use flexibility in scheduling
while maintaining service levels, and to have convincing facts to
present to the workforce. Most large postal organizations have had
the flexibility within their labor agreements to: Start shifts at
multiple times; vary reporting times over the working week for any
individual employee; limit or eliminate consecutive days; switch
idle workers to other work areas, and use a percentage of part-time,
flexible workers.

Few
of these flexibilities have been consistently used to reduce
operating costs and become more competitive. SOS allows postal
managers to use every one of these in an understandable fashion.

Cost-cutting scheduling prescriptions of SOS or any other resource
management system must be accepted as being manageable by facility
managers and perceived to be fair by the workforce. SOS has features
that allow:

•
Abiding strictly by the allowable ratios of part-time workers to
fulltime workers, and staying strictly within the limits set by
labor contracts and quality of life criteria for start time
variations, days-off rules, and lunch period allocations;• Management to
restrict the variety of shift start times initially prescribed by
SOS so that schedules are more manageable by floor supervisors;

• Reporting on percentage of idle time and number of cross-area
switches during the work days of each worker so that all
stakeholders understand that the schedules are reasonable.In summary, the SOS system allows organizations to cut costs, reduce
idle time, and enhance efficiency by:

•
Creating schedules that better match demand – with a wider variety
of start times for full-time workers and varying shift lengths and
start times for part-time workers;

• Giving management the ability to understand the impacts of options
regarding consecutive days off;

• Allowing an easy way to vary the schedules over the days of the
week;

• Allowing workers to switch among areas to lower idle times with
minimal inconvenience to the worker.

The initial application of SOS at a large sorting center of the USPS
revealed that it is possible to achieve significant savings. The
reduction ratios proved to be greater than what most postal
organizations can achieve in one or two years by attrition and other
avenues permitted by labor agreements or other limitations.